SeAH Steel Corp. v. United States

619 F. Supp. 3d 1309, 2023 CIT 21

• Court: United States Court of International Trade
• Decided: February 23, 2023
• Docket: Consol. 19-00086
• Status: Published

Opinion

Slip Op. 23-21

UNITED STATES COURT OF INTERNATIONAL TRADE

SEAH STEEL CORPORATION,

Plaintiff,

HUSTEEL CO., LTD., NEXTEEL CO., LTD., AJU BESTEEL CO., LTD., and ILJIN STEEL CORPORATION,

Consolidated Plaintiffs,

and

HYUNDAI STEEL COMPANY and ILJIN STEEL CORPORATION,

Plaintiff-Intervenors, Before: Jennifer Choe-Groves, Judge

v. Consol. Court No. 19-00086

UNITED STATES,

Defendant,

UNITED STATES STEEL CORPORATION, MAVERICK TUBE CORPORATION, TENARIS BAY CITY, INC., IPSCO TUBULARS INC., VALLOUREC STAR, L.P., and WELDED TUBE USA INC.,

Defendant-Intervenors. Consol. Court No. 19-00086 Page 2

OPINION AND ORDER

[Denying the motion for reconsideration.]

Dated: February 23, 2023

Jeffrey M. Winton, Michael Chapman, Amrietha Nellan, and Vi N. Mai, Winton & Chapman PLLC, of Washington, D.C., for Plaintiff SeAH Steel Corporation.

Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Eugene Degnan, Morris, Manning & Martin LLP, of Washington D.C., for Consolidated Plaintiff Husteel Co., Ltd.

J. David Park, Henry D. Almond, Daniel R. Wilson, Leslie C. Bailey, and Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., for Consolidated Plaintiff NEXTEEL Co., Ltd. and Plaintiff-Intervenor Hyundai Steel Company.

Jarrod M. Goldfeder, Trade Pacific PLLC, of Washington, D.C., for Consolidated Plaintiff AJU Besteel Co., Ltd. and Consolidated Plaintiff and Plaintiff-Intervenor ILJIN Steel Corporation.

Hardeep K. Josan, Trial Attorney, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., for Defendant United States. Also on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Mykhaylo Gryzlov, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Thomas M. Beline, Myles S. Getlan, James E. Ransdell, and Nicole Brunda, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenor United States Steel Corporation.

Gregory J. Spak, Frank J. Schweitzer, Kristina Zissis, and Matthew W. Solomon, White & Case LLP, of Washington, D.C., for Defendant-Intervenors Maverick Tube Corporation, Tenaris Bay City, Inc., and IPSCO Tubulars Inc.

Roger B. Schagrin, Christopher T. Cloutier, Elizabeth J. Drake, Kelsey M. Rule, Consol. Court No. 19-00086 Page 3

Luke A. Meisner, Paul W. Jameson, and William A. Fennell, Schagrin Associates, of Washington, D.C., for Defendant-Intervenors Vallourec Star, L.P. and Welded Tube USA Inc.

Choe-Groves, Judge: Plaintiff SeAH Steel Corporation (“SeAH”),

Consolidated Plaintiffs Husteel Co., Ltd., NEXTEEL Co., Ltd., AJU Besteel Co.,

Ltd., and ILJIN Steel Corporation, and Plaintiff-Intervenors Hyundai Steel

Company and ILJIN brought this consolidated action challenging the final results

published by the U.S. Department of Commerce (“Commerce”) in the 2016–2017

administrative review of the antidumping duty order on oil country tubular goods

(“OCTG”) from the Republic of Korea. See Certain Oil Country Tubular Goods

From the Republic of Korea (“Final Results”), 84 Fed. Reg. 24,085 (Dep’t of

Commerce May 24, 2019) (final results of antidumping duty admin. review; 2016–

2017); see also Issues and Decision Mem. for the Final Results of the 2016–2017

Admin. Review of the Antidumping Duty Order on Certain Oil Country Tubular

Goods from the Republic of Korea (May 17, 2019) (“Final IDM”), ECF No. 20-5.

The Court sustained the Final Results, as amended by the Final Results of

Redetermination Pursuant to Court Remand (“Remand Results”), ECF No. 118-1,

and entered judgment for Defendant United States (“Defendant”). J., ECF No.

148; SeAH Steel Corp. v. United States (“SeAH I”), 45 CIT __, 513 F. Supp. 3d

1367 (2021); SeAH Steel Corp. v. United States (“SeAH II”), 46 CIT __, 589 F.

Supp. 3d 1267 (2022). Consol. Court No. 19-00086 Page 4

Before the Court is the Motion for Reconsideration, ECF No. 149, filed by

SeAH. SeAH moves pursuant to USCIT Rule 59(e) for the Court to reconsider and

rescind the prior Opinion and Judgment, in which this Court sustained

Commerce’s differential pricing analysis in SeAH Steel Corp. v. United States, 45

CIT __, 513 F. Supp. 3d 1367 (2021). Mot. Recons. at 1. SeAH asserts that the

Court should remand the differential pricing analysis issue due to the issuance of

Stupp Corp. v. United States (“Stupp”), 5 F.4th 1341 (Fed. Cir. 2021). Id. at 2–4.

SeAH argues also that the Court erred in sustaining Commerce’s flawed

explanation of SeAH’s account of how SeAH’s cost of materials was reported. Id.

at 4–8. Defendant opposes SeAH’s Motion for Reconsideration. Def.’s Resp.

Opp’n SeAH Steel Corporation’s Mot. Recons. (“Def.’s Opp’n”), ECF No. 151.

For the reasons that follow, the Court denies the Motion for Reconsideration.

BACKGROUND

The Court presumes familiarity with the facts and procedural history set

forth in its prior opinion and recounts the facts relevant to the Court’s review of the

Motion for Reconsideration. See SeAH I, 45 CIT at __, 513 F. Supp. 3d at 1376–

77; SeAH II, 46 CIT at __, 589 F. Supp. 3d at 1272–73.

In the Final Results, Commerce applied a differential pricing analysis and

calculated SeAH’s weighted-average duty margin using the alternative average-to-

transaction method. Final IDM at 60–71. Commerce included inventory valuation Consol. Court No. 19-00086 Page 5

losses in SeAH’s general and administrative (“G&A”) expenses. Id. at 82–83.

The Court issued SeAH I on April 14, 2021. In SeAH I, the Court

considered six Rule 56.2 motions for judgment on the agency record and nine

issues presented by the Parties. See SeAH I, 45 CIT at __, 513 F. Supp. 3d at

1375–76. Relevant here, the Court held that: (1) Commerce’s application of the

Cohen’s d test, the 0.8 threshold, and the 33% and 66% ratio test thresholds were

in accordance with the law; Commerce’s explanation for why the A-to-A method

could not account for the pattern of price differences in SeAH’s sales was in

accordance with the law; and Commerce’s use of the alternative A-to-T method to

calculate SeAH’s dumping margin was in accordance with the law, id. at __, 355

F. Supp. 3d at 1379–85; and (2) Commerce’s decision to include SeAH’s inventory

valuation losses as G&A expenses was not supported by substantial evidence

because Commerce did not cite relevant record evidence, id. at __, 355 F. Supp. 3d

at 1405–06.

The U.S. Court of Appeals for the Federal Circuit issued Stupp on July 15,

2021, remanding Commerce’s use of the Cohen’s d test for further explanation as

to “whether the limits on the use of the Cohen’s d test prescribed by Professor

Cohen and other authorities were satisfied in this case or whether those limits need

not be observed when Commerce uses the Cohen’s d test in . . . adjudications.”

Stupp, 5 F.4th at 1341, 1357–60. Consol. Court No. 19-00086 Page 6

In the Remand Results, Commerce continued to include inventory valuation

losses in SeAH’s G&A expenses. Remand Results at 24–27.

In SeAH II, the Court sustained Commerce’s inclusion of SeAH’s inventory

valuation losses in SeAH’s G&A expenses ratio because Commerce provided

further explanation with additional details and citations to record evidence that

sufficiently demonstrated that the inventory valuation losses were recognized as

actual in SeAH’s normal books and records. SeAH II, 46 CIT at __, 589 F. Supp.

3d at 1285–88. The Court entered judgment for Defendant.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28

U.S.C. § 1581(c), which grant the Court authority to review actions contesting the

final results of an administrative review of an antidumping duty order. The Court

will hold unlawful any determination found to be unsupported by substantial

record evidence or otherwise not in accordance with the law. 19 U.S.C.

§ 1516a(b)(1)(B)(i).

DISCUSSION

SeAH asks the Court to reconsider its decision affirming Commerce’s

differential pricing analysis and inclusion of SeAH’s inventory valuation losses in

SeAH’s G&A expense ratio. Mot. Recons. at 2. Defendant argues that there is no Consol. Court No. 19-00086 Page 7

basis for the Court to reconsider its decision regarding the differential pricing

analysis and inventory valuation losses. Def.’s Opp’n at 4–9.

USCIT Rule 59(e) provides that:

A motion to alter or amend a judgment must be served no later than 30 days after the entry of the judgment.

USCIT R. 59(e). “The major grounds justifying a grant of a motion to reconsider a

judgment are an intervening change in the controlling law, the availability of new

evidence, the need to correct a clear factual or legal error, or the need to prevent

manifest injustice.” Ford Motor Co. v. United Sates, 30 CIT 1587, 1588 (2006)

(citing Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d

Cir. 1992)).

I. Commerce’s Use of the Cohen’s d Test

In Stupp, the U.S. Court of Appeals for the Federal Circuit (“CAFC”)

remanded Commerce’s use of the Cohen’s d test for further explanation because

the data Commerce used may have violated the assumptions of normality,

sufficient observation size, and roughly equal variances. 5 F.4th at 1357–60. The

CAFC addressed Commerce’s argument that Commerce does not need to worry

about normality because it is using a population instead of a sample, stating that

Commerce’s argument “does not address the fact that Professor Cohen derived his

interpretive cutoffs under the assumption of normality.” Id. Consol. Court No. 19-00086 Page 8

Commerce applied its two-step differential pricing methodology in this case,

the first step of which was the Cohen’s d test. See Prelim. Decision Mem.

(“Prelim. DM”) at 11–13, PD 274 (Oct. 3, 2018); Final IDM at 5–6, 71 (applying

the same methodology as in the Prelim. DM without change to its differential

pricing methodology). The standard of review for considering Commerce’s

differential pricing analysis is reasonableness. Stupp, 5 F.4th at 1353. The CAFC

and the U.S. Court of International Trade have held the steps underlying the

differential pricing analysis as applied by Commerce to be reasonable. See e.g.,

Mid Continent Steel & Wire, Inc. v. United States, 940 F.3d 662, 670–74 (Fed.

Cir. 2019) (discussing zeroing and the 0.8 threshold for the Cohen’s d test); Apex

Frozen Foods Priv. Ltd. v. United States, 40 CIT __, __, 144 F. Supp. 3d 1308,

1314–35 (2016) (discussing application of the A-to-T method, the Cohen’s d test,

the meaningful difference analysis, zeroing, and the “mixed comparison

methodology” of applying the A-to-A method and the A-to-T method when 33–

66% of a respondent’s sales pass the Cohen’s d test), aff’d, 862 F.3d 1337 (Fed.

Cir. 2017); Apex Frozen Foods Priv. Ltd. v. United States, 862 F.3d 1322 (Fed.

Cir. 2017) (affirming zeroing and the 0.5% de minimis threshold in the meaningful

difference test). However, the CAFC has stated that “there are significant concerns

relating to Commerce’s application of the Cohen’s d test . . . in adjudications in Consol. Court No. 19-00086 Page 9

which the data groups being compared are small, are not normally distributed, and

have disparate variances.” Stupp, 5 F.4th at 1357.

The Cohen’s d test is “a generally recognized statistical measure of the

extent of the difference between the mean of a test group and the mean of a

comparison group.” Apex Frozen Foods, 862 F.3d at 1342 n.2. The Cohen’s d test

relies on assumptions that the data groups being compared are normal, have equal

variability, and are equally numerous. See Stupp, 5 F.4th at 1357. Applying the

Cohen’s d test to data that do not meet these assumptions can result in “serious

flaws in interpreting the resulting parameter.” See id. at 1358.

The Court concludes that SeAH has not raised a ground justifying a grant of

its Motion for Reconsideration of the judgment. Commerce’s use of a population,

rather than a sample, in the application of the Cohen’s d test sufficiently negates

the questionable assumptions about thresholds that were raised in Stupp. As this

Court considered in SeAH I, Commerce explained in the Final IDM that

“application of the Cohen’s d test was appropriate because ‘the U.S. sales data . . .

reported to Commerce constitute[] a population. As such, sample size, sample

distribution, and the statistical significance of the sample are not relevant to

Commerce’s analysis.’” 45 CIT at __, 513 F. Supp. 3d at 1382–83 (emphasis

added) (quoting Final IDM at 66). Based on Commerce’s explanation, this Court

concluded in SeAH I that “Commerce’s application of the Cohen’s d test to Consol. Court No. 19-00086 Page 10

determine whether there was a significant pattern of differences was reasonable.

Commerce did not need to consider sample size, sample distribution, and the

statistical significance of the sample.” Id. The concerns described in Stupp that

might be raised when the Cohen’s d test is applied to samples are inapplicable

because in this case, Commerce applied the Cohen’s d test to a population.

SeAH has not presented a ground justifying reconsideration of the judgment

pursuant to USCIT Rule 59(e) and the Court will not disturb its previous decision

regarding Commerce’s use of its differential pricing analysis, in particular its

application of the Cohen’s d test. The Court denies SeAH’s Motion for

Reconsideration as to the differential pricing analysis issue.

II. Inventory Valuation Losses

SeAH argues that Commerce’s inclusion of inventory valuation losses in its

G&A expense ratio is unsupported by substantial evidence and the Court should

reconsider and reverse its conclusion sustaining Commerce’s determination. Mot.

Recons. at 7–8.

SeAH provides no new controlling law, evidence, or arguments but instead

continues to dispute Commerce’s determination. See id. at 4–8. SeAH repeats its

arguments, which the Court considered already, that SeAH’s cost calculations

reflected the full historical cost of the raw-materials and work-in-process

inventories used in production and including SeAH’s inventory valuation losses in Consol. Court No. 19-00086 Page 11

calculating SeAH’s costs resulted in double counting of SeAH’s actual cost of

materials. Id. at 4–5. SeAH asserts that the Court erred in relying on Commerce’s

explanation of SeAH’s account of how SeAH’s cost of materials was reported. Id.

Because the Court evaluated SeAH’s arguments, Commerce’s explanation, and the

record evidence already in SeAH I and SeAH II and SeAH has not presented a

ground justifying reconsideration of the judgment pursuant to USCIT Rule 59(e),

the Court will not disturb its previous decision regarding Commerce’s treatment of

SeAH’s inventory valuation losses. The Court denies SeAH’s Motion for

Reconsideration as to the inventory valuation losses issue.

CONCLUSION

For the foregoing reasons, the Court denies the Motion for Reconsideration

as to the Cohen’s d test and inventory valuation losses. Accordingly, it is hereby

ORDERED that the Motion for Reconsideration, ECF No. 149, is denied.

/s/ Jennifer Choe-Groves Jennifer Choe-Groves, Judge Dated: February 23, 2023 New York, New York